The new Charities SORP 2026, explained
The SORP (the Statement of Recommended Practice) is the rulebook that sets out how charities preparing accruals accounts must present them. A new edition, Charities SORP 2026, applies to accounting periods beginning on or after 1 January 2026. In practice the first year-ends affected are 31 December 2026 and the year-ends that fall through 2027.
It is the most significant refresh in a decade, largely because the underlying accounting standard, FRS 102, has itself been updated. This guide covers what matters for a trustee.
The headline: a new three-tier framework
SORP 2026 sorts charities into three tiers by gross income for the year, with more required of each higher tier. Unlike company law there is no averaging across years, so a charity can move between tiers as its income changes.
| Tier | Gross income | Broadly what it means |
|---|---|---|
| Tier 1 | Up to £500,000 | Simplest reporting; fewest disclosures |
| Tier 2 | £500,000 to £15 million | Activity-based accounts and fuller disclosures |
| Tier 3 | Over £15 million | The most detailed reporting, including impact and sustainability |
Most small charities that prepare accruals accounts will sit comfortably in Tier 1.
Only Tier 3 charities (income over £15 million) must prepare a cash-flow statement under the SORP. Check with your examiner whether anything else requires one. Tier 1 charities keep the simplest presentation.
What changes under FRS 102
Alongside the tiers, SORP 2026 pulls in changes to FRS 102 that take effect for the same periods:
- Leases come onto the balance sheet. Most leases, for example renting premises or equipment, will now appear as an asset (the right to use the item) and a matching liability, rather than sitting off the balance sheet as they largely did before. Charities that lease property will see their balance sheet grow.
- A new way of recognising income. A five-step model governs when and how income from goods, services and contracts is recognised. For grant-funded charities the everyday impact is usually modest, but it is worth your finance team understanding it.
- Going concern, stated explicitly. Trustees must state whether they regard the charity as a going concern and flag any material uncertainties. This was already required under FRS 102; SORP 2026 adds more guidance on how to do it.
- A fuller trustees' annual report. Expect more narrative on impact and sustainability, particularly for the higher tiers.
If your charity is small enough to prepare receipts-and-payments accounts (allowed up to the accounts thresholds), the SORP largely does not apply to you, because it governs accruals accounts. Charitable companies cannot use receipts-and-payments accounts, so they follow the SORP whatever their size. The ceiling depends on where you are registered. In England and Wales it is £500,000 for years ending on or after 30 September 2026. In Scotland it is still income under £250,000, and in Northern Ireland £250,000 or less, so a Scottish or Northern Irish charity above those figures prepares accruals accounts and follows the SORP.
What your board should do
- Confirm which tier you are in based on your gross income.
- Talk to your examiner or accountant early about how the changes affect your next set of accounts.
- If you lease premises or equipment, ask how the new lease rules will change your balance sheet.
- Refresh your going-concern and reserves narrative in the trustees' annual report.
See also the related audit and examination threshold changes. Technical guidance is published by the ICAEW charity community and ICAS.
This guide is general information for trustees and committee members, not legal or accounting advice, and every charity is different. Always confirm the current position with the relevant regulator or a suitably qualified adviser before acting. Last reviewed October 2026.
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